In the chart above, time t+2, and t+3, show a bearish crossover.

Crossover EventsДЄ crossover occurs when two different moving average lines cross over one another. The longer the period of the average, the more stable the line is but the slower it is to react to changes. Moving average 2, the red is a slow moving average because it takes a larger sample of points and therefore has a slower reaction time to changes in price. Moving average 1, the blue line, is a fast moving average because it uses fewer data points, or a shorter time period in its calculation. The length of time that the moving average uses in its calculation is the period. The blue line is the first to react to the price turning followed by the red line. The price, moving average 1 and moving average 2 are now all on the same path again after the price changed direction from rising to falling.ДЇinally at time t+4, the price starts to rise again and the same process happens again but in reverse.

Meanwhile at this time the red line (MA 2) is still rising.ДЄt time t+3, all three lines are falling. Notice that the blue line (MA 1) starts to fall next after the price line. At time t+2, the price line starts to fall. Figure 1: Process of moving average crossover В© forexopДЄt time t+1 there are three straight lines, the price, the moving average 1 (MA 1) and the moving average 2 (MA 2).

200 ema line